US. Treasury-New Reporting Requirements for Business Owners

Businesses will have to report information on their beneficial owners to the U.S. Treasury in 2024. What businesses have to report? Those required to report are called reporting companies and this includes: a) Corporations; Limited Liability Companies; or another type that was created in the United States by filing a document with the Secretary of State; or b) Foreign companies registered to do business in any U.S. State or Indian tribe.

The takeaway is that almost all businesses, including one-owner companies, are reporting companies that will have to report unless exempt. There are 23 types of entities that are exempt from the beneficial ownership requirements. A checklist of the 23 exemptions that helps determine whether your company qualifies for an exemption is included in FinCEN’s (Financial Crimes Enforcement Network—agency within the U.S. Treasury) Small Entity Compliance Guide. These exemptions are for publicly traded companies, nonprofits, certain large operating companies and others.

FinCEN will start accepting reports on January 1, 2024. If your company was created for registered prior to January 1, 2024, you will have until January 1, 2025 to report beneficial ownership information. If your company was created or registered on or after January 1, 2024, and before January 1, 2025, you must report beneficial ownership information within 90 calendar days after receiving notice that your company’s creation or registration is effective, whichever is earlier. If your company was created or registered on or after January 1, 2025, you must report beneficial ownership information within 30 calendar days after receiving actual or public notice that its creation or registration is effective. Any updates or corrections to beneficial ownership information that your previously filed must be submitted within 30 days.

The reporting companies must obtain information from their beneficial owners and report that information to the FinCEN.

Bowman Law Firm, Gene M. Bowman, Attorney, CPA, Huntsville, Alabama